A
situation where direct incomes (sale) exceed direct expenses is called gross
profit.
A company's revenue minus its value of products sold . it may be a company's residual profit once commercialism a product or service and deducting the value related to its production and sale.
To calculate gross profit: examine the statement, take the revenue and work out the value of products sold . additionally known as "gross margin" and "gross income".
When analyzing a corporation, lucre is incredibly necessary as a result of it indicates however with efficiency management uses labor and provides within the production method. additional specifically, it will be accustomed calculate lucre margin. confine mind that lucre varies considerably from trade to trade. as an example, take a glance at the subsequent scenario to examine however lucre indicates a company's potency.
Company A and Company B each have $1 million in sales. Company A's value of products sold (COGS) is $900,000 and Company B's COGS is $800,000. Company A's gross profit are $100,000 and Company B's gross profit are $200,000. Company B spends less cash to form identical quantity of sales, and is thus additional economical.
Interest Expense ($ 10,000)
Taxes ($ 10,000)
Net Profit $ 100,000
To calculate gross profit: examine the statement, take the revenue and work out the value of products sold . additionally known as "gross margin" and "gross income".
When analyzing a corporation, lucre is incredibly necessary as a result of it indicates however with efficiency management uses labor and provides within the production method. additional specifically, it will be accustomed calculate lucre margin. confine mind that lucre varies considerably from trade to trade. as an example, take a glance at the subsequent scenario to examine however lucre indicates a company's potency.
Company A and Company B each have $1 million in sales. Company A's value of products sold (COGS) is $900,000 and Company B's COGS is $800,000. Company A's gross profit are $100,000 and Company B's gross profit are $200,000. Company B spends less cash to form identical quantity of sales, and is thus additional economical.
Example
Income Statement for Company XAZ, Inc.
for the year ended December 31, 2008
Total Revenue $200,000
Cost of Goods Sold ($ 20,000)
Gross Profit $ 180,000
Operating Expenses
Salaries $15,000
Rent $15,000
Utilities $10,000
Depreciation $20,000
Total Operating Expenses ($ 50,000)
Operating Income $120,000for the year ended December 31, 2008
Total Revenue $200,000
Cost of Goods Sold ($ 20,000)
Gross Profit $ 180,000
Operating Expenses
Salaries $15,000
Rent $15,000
Utilities $10,000
Depreciation $20,000
Total Operating Expenses ($ 50,000)
Interest Expense ($ 10,000)
Taxes ($ 10,000)
Net Profit $ 100,000
No comments:
Post a Comment